The Narain effect
The Economic Times — March 24, 2005

“Great start by the Indian, Narain Karthikeyan.” These were the first words from the TV commentator the moment the five red lights went out, signalling the start of Formula 1’s Sepang Grand Prix on Sunday. And all Indian F1 lovers craned their necks to see the yellow Jordan swerve smartly to the right and accelerate away. Karthikeyan did well to finish eleventh on a course difficult to navigate, made more so, by the sweltering heat of the Malaysian sun. In India, his sponsors were a happy lot, relieved to see their investments pay off well. “The sponsors are pleased with the way things have turned out,” said Karthikeyan himself.

“It was the icing on the cake. The kind of media attention that F1 is getting due to Narain is going to translate into good business,” said Sanjay Sharma, head, motor sports, JK Tyres. And Narain’s success is making waves in corporate circles. After all, F1 is the second-most watched sport in India after cricket. No doubt, the F1 audience is limited, but it’s growing at a fast clip. The TAM viewership data shows that F1’s net reach was 31.4m in ‘04, a 27% increase over ‘03. Though Indians account for a minuscule percentage of the F1 viewership worldwide, globally, about 800m watched it last year.

The NK effect could see the viewership numbers scaling up fast in India. “With NK joining the circuit, the level of interest is expected to go up manifold. We expect many first-time viewers to tune into F1 this year,” says Sanjay Kailash, V-P, advertising sales, ESPN Software. Companies are now looking at the sport as an advertising opportunity. Though traditional advertisers like tyre manufacturers MRF and Bridgestone, and oil retailers like BPCL (Brand Speed) have advertised during races, others like United India Insurance, Amaron Batteries, Petronas, Toyota, Exxon Mobil and UPS have joined the party.

Karthikeyan himself is curious about TRPs. He asks, “Do you know about the TRPs of the two races? How does it compare to cricket?” Well, the interest levels will take a long time to climb to those for cricket, but it’s making a start for sure. Second tier towns have also been warming up to F1, and Karthikeyan could well be the person who could rev their interests. “People are cheering Narain even in small cities. He is to F1 what Sania Mirza is to tennis. His success will be the catalyst that could drive the interest for F1 in India,” says Pradeep Gidwani, CEO, Fosters India. Fosters has been screening races live in about 20 cities.

Even Star TV has scaled up its exclusive tie-ups for F1 screenings in restaurants to 100 establishments in 10 cities. Luxury brands are also set to benefit from Narain’s exploits on the race track. Last year, Tag Heuer, launched its F1 watch as the entry-level product, and the model accounted for a quarter of the company’s sales. Many similar products are looking to cash in on their F1 association. One thing’s for sure: Karthikeyan has caught India’s fancy and corporates are ready to pounce and take advantage.